Starting a company to rent out my property? How?

antrobus

BitterAndTwisted wrote: »

I suggest you consider talking to on accountant at an organisation like Tax-Assist Accountants, which is a franchise specialising in the tax-affairs of the self-employed, partnersips and small-to-medium sized limited companies.

However "Franchisees do not need any formal accountancy qualifications". I would suggest to the OP that their local area likely has a number of accountancy practices "specialising in the tax-affairs of the self-employed, partnerships and small-to-medium sized limited companies" and then many of these may well actually be run by individuals in possession of a professional accountancy qualification. Seeking a personal recommendation is the best approach.

mlz1413

before you rent the property through yourself or a company PLEASE read up on what being a Landlord involves, Landlord Zone and National Landlords Association websites would be a good start.

then do a business plan to see if your idea is finanically viable

then when you know your income verus allowable expenses so you approx profits per year for tax purposes go and see a tax accountant for the best way to deal with you affairs.

BitterAndTwisted

antrobus wrote: »

However "Franchisees do not need any formal accountancy qualifications". I would suggest to the OP that their local area likely has a number of accountancy practices "specialising in the tax-affairs of the self-employed, partnerships and small-to-medium sized limited companies" and then many of these may well actually be run by individuals in possession of a professional accountancy qualification. Seeking a personal recommendation is the best approach.

The Tax-Assist accountant I worked for had a number of professional qualifications. However, I suggested that the OP consult an accountant like that firm, not just that one. Obviously when one consults with a professional it is up to them to satisfy themselves that the person they are talking to has all of the professional qualifications necessary.

I quite agree with you that a personal recommendation would be preferable and I would most probably see more than one on their free half-hour consultations to see which one most suited my needs. I suspect even a part-qualified accountant would be able to look after the OP's needs standing on their head as they are not terribly complex.

RabbitMad

antrobus wrote: »

I'm sorry I don't understand this;


You can't go around "claiming that the mortage on your main home is actually a business loan" unless the mortage on your main home is actually a business loan. To do so would count as tax evasion, if not plain and simple fraud, and could potentially have extremely unpleasant consequences for the OP if they actually did so.

Yes you can. You only have such a high mortgage on you main home as you didn't sell the house now rented. Therefore there purpose of the mortgage was to set up a property letting business and purchase the assets for that business. Thus, a proportion of the Mortgage on the main home equivalent to a percentage of the rented houses value can be used to reduce the income tax payable on the rental house.

Read up about this on HMRC's website if you don't believe me. This is how I funded my short lived LTB (Let to Buy)

Seanymph

Sorry - been out all day.

buy a limited company - costs about £180.00.

You, as the property owner, use the company to let your property. the company is run from the house you live in - so you get allowances for computer/phone/electric etc. The company pays your wife as an employee up to her tax bracket allowance. The company pays any advertising etc.

The company will make no money, your wife won't pay tax and your household bills will be partly covered.

You meanwhile still own your property and can raise money against it.

You don't need 'any old accountant' because many will not tell you how to minimise your tax efficiently. They will respond to what you propose, but avoid suggesting things.

You need someone who is good at what they do, and prepared to advise you...... or you need to do a lot of research and learn for yourself.

But the set up as described was what we were going to do - and seemed a very cost effective way to suit our circumstances.

Don't open the bank account until you need it - you will get two years free banking from many banks, don't waste them in your keenness to open a bank account.

JQ.

antrobus wrote: »

You can't go around "claiming that the mortage on your main home is actually a business loan" unless the mortage on your main home is actually a business loan. To do so would count as tax evasion, if not plain and simple fraud, and could potentially have extremely unpleasant consequences for the OP if they actually did so.

That statement is wrong - you can offset borrowings on your own house for the purposes of minimising tax on the buy-to-let.

Vincenzo

antrobus wrote: »

You can't go around "claiming that the mortage on your main home is actually a business loan" unless the mortage on your main home is actually a business loan. To do so would count as tax evasion, if not plain and simple fraud, and could potentially have extremely unpleasant consequences for the OP if they actually did so.

You can off set interest on loans up to the value of the property when first let, regardless of where/when they are secured.

Vincenzo

mlz1413 wrote: »

before you rent the property through yourself or a company PLEASE read up on what being a Landlord involves, Landlord Zone and National Landlords Association websites would be a good start.

then do a business plan to see if your idea is finanically viable

then when you know your income verus allowable expenses so you approx profits per year for tax purposes go and see a tax accountant for the best way to deal with you affairs.

The OP has already stated the property is mortgage free, it is hard to see how their costs will exceed the income.

Vincenzo

wywywywy wrote: »

That is spot on. We are getting married and she is a basic tax rate payer. But if the property is under my name, would it not be a problem with rental income going to her? Or do I need to transfer the property to her name?

You could consider transferring ownership (anything from part to full) of the property to your wife to take advantage of her lower income tax band. You cannot simply apportion all the rental income to your wife, whilst you wholly own the investment.

mlz1413

Vincenzo wrote: »

The OP has already stated the property is mortgage free, it is hard to see how their costs will exceed the income.

OP has been given advise to put borrowings against rental as OP has said they are a higher rate tax payer.

also if OP doesn't read up on LL responsibilities then they may not get any rent from a professional tenant so legal fees to evicit them may well exceed any income.